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1. PERSONAL UPDATE
Focusing On A Winning Formula - Dean &Elise Parker

Our number one goal last year when we launched this website was about giving back to others through education. After all, this is how we got our start on our property investing journey. Since then we have spoken in various states across Australia and are on the verge of selling our 500th copy of The Complete Renovation System. What a year! Maybe we have been a little 'slack' with this newsletter and we have a good reason for that. Our property investing business has been going gang busters! The deals we are finding, buying and completing are going so well that unfortunately our newsletters have taken a back seat. The good news is, our systems are all documented so we know at least 491 people who have bought The Complete Renovation System will not be falling behind!

Since the last edition two months ago, we have purchased more property in Geelong and Queensland and pre-sold an entire development project (13 new townhouses) in Ballarat. The team in our office has also been buying renovation and development sites too. We understand that the best way to educate and give back is to continue to show you great deals, so if we miss a month here and there because we continue to do what we are best at (property investing) we are sure you will forgive us.

Life balance is a high priority for us and when things get busy we are conscious not to let our top priorities such as health, family and our relationships suffer. Pictured on the right is a photo of us at a friends wedding recently. It is always enjoyable spending quality time with family and friends as our properties can be very lonely company!

As owners of The Complete Renovation System would know, this newsletter is reinforcement for all the case studies, templates, software and systems that are part of the entire system. We are very excited to share with you the results of one of our customers who is moving forward in leaps and bounds.

2. RENOVATING TO YOUR TARGET MARKET
Begin With The End In Mind! Elise Parker

One of the biggest mistakes rookie renovators make is not identifying and renovating to their target market. If you renovate your property to look amazing but are unable to sell or rent the property at the end of all your hard work then you could be left holding a lemon. (No doubt a very nice looking lemon but unfortunately not a profitable one!).

Two Biggest Mistakes

Mistake #1 - Poor Choice Of Property

An example of a poor choice in property might be to renovate a double story house to suit a retired couple who are unlikely to want to be going up and down stairs all day. The property may have a extra bedroom, however to this target market it does not mean it will add value, they are downsizing so bigger is not always better. Poor choices can also lead to under utilised cash and time investment in your property deal, because there may not be a market for your completed properties.

Mistake #2 - Poor Choice Of Renovation

There is no point putting an expensive kitchen into a suburb with a reputation for being average, whilst your buyers will appreciate the stunning kitchen they will not pay you any more for it than if it was a new kitchen with cheaper furnishings. It is important to avoid putting in an InSinkErator, wall mounted plasma screen or fancy landscaping just because you think it looks good. Remember you are not living there so take the emotion out of the renovation and focus on your goal of making a profit. When you know what your target market is expecting, decisions become so much easier. For example, different types of floor coverings are expected and preferred in different geographical areas, houses and even target markets. In some areas, people always prefer carpet, while in other areas, tiles are desired. Ballarat is known for being cold, so carpet is far more desirable than tiles, whereas in Queensland, the reverse is true. It is obvious when you think about it, so just make sure you consider all areas of your renovation.

How To Renovate To Your Target Market

Step One: Identify Your Target Market Before You Buy

So how do you find out what the market wants? Speak to local real estate agents and ask for common buyer feedback and requirements. As it is their job to be in touch with the market, pick their brains on what is hot property in the local area at the time. Also speak with interior designers, local trades people and even product suppliers as to what they see as requirements for fixtures and fittings - keeping in mind different house and price points.
The Complete Renovation System includes a 'Finding A Property' checklist to ensure that for each and every property you inspect all bases are covered and you can easily compare properties and find trends. Using the 'Value Add' checklist, you can also identify opportunities for areas of improvement in each property.
Take all the opinions on board and back them up with your own research and findings in step 2.

Step Two: Inspect Other Properties In The Selling Range

It is important that you get a feel for what your renovated property will sell for in the current market, and what the fixtures and finishes are like in that price range. This involves inspecting many houses in your anticipated selling price range. Open for inspections are a great way to do this as you are being respectful of the real estates agent time. You do need to inspect other unrenovated properties - to confirm your buying price, however this should have already been done. At this point you are inspecting properties in the price range you are expecting to sell your renovated home. You want to know what the market will pay for the the finished product. Be careful when doing your research that you don't get sucked into the marketing of agents. You want to know what a property actually sells for, not the price range. For example, a range might be $400-450k. if you work on the selling price of $450k however, but that property actually sells for $420k, the difference could make or break your profit.

Step Three: Do A Budget

BEFORE you buy a property, it is imperative that you do a full costing; a room by room analysis on everything that is needed. This must include all supplies and materials, expected labour and trade costs, holding costs, stamp duty, agents selling fees and anything else you can think of. This will help you to decide if your deal is worth persuing. There is always another deal and doing a budget before you buy is a huge key. You actually lock in a profit before you start, the rest is just taking action. The easiest way to do this is to use software such as the Renovation Costing Tool contained in The Complete Renovation System. Having everything laid out in front of you saves time and costly mistakes.

Step Four: Implement Your Plan

You know your target market, have inspected properties similar to the one you want to produce and based on your completed budget, the numbers do work. Now it is time to take action. This is where investors start to doubt themselves, second guess and then miss out. If you have done the groundwork be confident in what you have done.

3. HOW TO GET AN END VALUATION BEFORE YOU START
It Is Not Just Developments That You Can Get An End Value On From The Banks – Dean Parker

This cartoon that I found on the internet says it all. It is a bunch of people seemingly amazed that it is possible to qualify for a loan. This is the same reaction I get when I explain that before I even purchase a property I get the bank to agree to a loan based on the end valuation of the renovated property. "But that is just for developments" is the common thought. Yes is is more common in the development and building industry to get a valuation based on the ‘completed’ property before any development has commenced and you can apply the exact same principals to renovations too.

How do we do it?
Firstly, we have a relationship with our valuer - who we know is a member of the banks panel.
Secondly, we provide our valuer with our completed Renovation Costing Tool so they can see all the changes we are going to make in each room, including the costs. Just like a developer shows how they are going to improve a block of land with the new buildings, a renovator can do the same thing by showing how they are improving an existing house. A developer can charge a premium above the cost of building because they have done the hard work and got the property to a point where the market is prepared to pay more. The same goes for a renovation.
Why wouldn't the bank be prepared to lend based on the end value when all costs are identified and the renovation process has been identified.
At this point, we also provide a schedule of finishes which includes photos, web sites or samples of the items we are going to use.
Once you have completed renovations in your portfolio, you can include photos of your previous renovation for ideas too.

It is worth noting that our renovations carry very little risk, as part of our risk management, we always get a end valuation before purchasing a property to ensure we are in line with the current market.

4. FUNNY FOTOS
Creative Letter Boxes – Gerry Giraffe

Sometimes a home's character can start at the driveway with a letterbox. Whilst some of these might be a little over the top, they are good for a laugh.

1. This is kind of backwards, I think this home has misunderstood what email actually is! Or perhaps with the release of the iPad, this Apple desktop has now become completely redundant!

2. Is this a frog or a dog or a strange coloured cow? Maybe it is the postman revenge.

3. This creative chiropractor is all over manipulating his mail.

4. One way to protect your mail.

5. Remember that song from 1999 by Eiffel 65 'I'm Blue'?

6. They've nailed this idea for a creative letterbox.

5. MEMBER QUESTIONS OF THE MONTH

Thanks again for all the questions we have received over the past two months, we have included two that are asked all the time. We have combined a range of similar questions to form them. Thanks to Michelle, Greg, Shaun and Tim for your questions. To have your questions answered in the next newsletter, send to This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Do you always get 3 quotes?

When we move to a new area we always get at least three quotes for every trade and job required. Until we have a great working relationship with a trade or supplier we continue to get quotes on several projects in that area. Once we establish our team we work with them and continue to communicate our goals for each project. With that established team in place, from time to time we do get additional quotes in order to keep our trades honest, on track and to confirm where their costs are at in relation to the market place. For instance, we have been using a render company for the last couple of years in Ballarat and with a recent purchase just decided to get another price as a comparison. The second quote came in substantially cheaper. We told our original render company about our findings and explained the situation. He was fine and understood our requirements and business and said he could not come close to the lower price and to go with it. We still have a good relationship with this trade and will use him on other jobs in his local area.

Do we still use The Complete Renovation System checklists?

Absolutely, our business is based around systems and we use them all daily. We have a dedicated systems folder, divided up by property containing each of current and relevant checklists. Every Monday as we work through our action list and review each property, we know where we are at and what actions are required, because we are prompted by the relevant checklists. We designed our renovation product around what we have in our business. Systems make our productivity increase and also allow us to sleep at night as we don't have to remember what is going on at each and every project all the time. From time to time we send updates to our product owners too with new and helpful checklists we have created over the last year.
In the next newsletter Elise and Nickie will talk about when to use certain systems in the different parts of the renovation process.

Keep your questions coming!

6. CASE STUDY - Kelvin pockets $63,225 while still working full time

Kelvin did not have any previous renovation experience however following one of our Renovation seminars, he bought and diligently followed all eight steps in The Complete Renovation System to purchase and profit from this 3 bedroom home in the outer suburbs of Melbourne. Having dedicated time identifying several potential areas, Kelvin became an area specialist, and quickly realised this house was a renovation gold mine. While working as a a full time employee in Melbourne's CBD, Kelvin applied an easy and tasteful cosmetic renovation in his 'spare' time and converted this untidy property into a desirable home. Being creative with his item purchases and keeping renovation costs to a minimum, allowed Kelvin to walk away with a very healthy lump sum cash profit.

The Numbers

Purchase Price	$283,500
Acquisition Costs	$13,437
Renovation Costs	$30,503
Holding Costs	$9,000
Selling Costs	$12,335
Total Costs	$348,775
Selling Price	$412,000
Profit	$63,225

The Video

Kelvin was kind enough to let us come over and take a look around his completed property.

Please note: The video below runs for 25 minutes as Kelvin shares his learning outcomes from his first deal!